The income statement for Pierre Paul Company for the year en

The income statement for Pierre Paul Company for the year ended Decembber 31, 2016 is as follows:

Pierre Paul Company

Income Statement

For the Year ended December 31, 2016

Revenues

Sales Revenue $53,000

Interest Revenue $4,000

Total Revenues $57,000

Expenses

Cost of goods sold $30,000

Salaries and wages expense $18,000

Interest Expense $1,500

Total expenses $49,500

Net Income $7,500

Prepare the entries to close the revenue and expense accounts at December 31, 2016. You may omit explanations for the transactions.

Answer:

Revenue:

Expenses:

Solution: Closing entries

Date	Accounts	Debit	Credit
(a)	Sales Revenue Dr	$53,000
	Interest Revenue Dr	$4,000
	To Income Statement		$57,000

(b)	Income Statement Dr	$49,500
	To Cost of goods sold		$30,000
	To Salaries and wages expense		$18,000
	To Interest Expense		$1,500